Publications
Publications
- June 1996 (Revised July 1997)
- HBS Case Collection
Hostile Bid for Red October, The
By: Benjamin C. Esty and Alan Bigman
Abstract
Manatep Bank, a Russian investment bank, has just announced the country's first hostile tender offer for Red October, a confectionery company located in Moscow. As the chief financial officer of the target company, Yuri Yegorov must decide how to respond, how much his company is worth, and what to recommend to the board of directors. The context of the case, the nascent Russian financial system, raises a variety of interesting and complex valuation issues such as determining discount rates in countries with high inflation and unstable governments, uncertain property rights, and poor financial information. The absence of financial and institutional infrastructure provides a stark contrast to financial markets and takeovers in more developed countries.
Keywords
Capital Markets; Cash; Governance Controls; Financial Condition; Investment Banking; Financial Markets; Trade; Valuation; Financial Management; Food and Beverage Industry; Moscow
Citation
Esty, Benjamin C., and Alan Bigman. "Hostile Bid for Red October, The." Harvard Business School Case 296-084, June 1996. (Revised July 1997.)